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Justice. Only Justice Shall Thou Pursue

Wednesday, September 05, 2012

Federal Judge Rules Airlines Must Stand Trial On 9/11 Negligence

American Airlines and United Airlines have been trying to get a negligence case thrown out against them over their actions on 9/11 that led to the destruction of the World Trade Center in New York City. World Trade Center Properties, which is Larry Silverstein's company, had sought to hold the airlines liable for the destruction of the WTC and claimed damages of $8.4 billion.

Judge Alvin Hellerstein ruled that the airlines couldn't get the case dismissed on summary judgment, but also capped the damages sought to $2.8 billion (the amount that Silverstein paid for the 99-year lease).

Judge Hellerstein said at this stage he could not reasonably determine the defendants' claim that insurance payments received by WTCP covered the damages the company is seeking from them.

"On this record, before trial, I am not able to make such findings," Judge Hellerstein said in a court filing.

The case is in re September 11 litigation, Case No. 21-MC-101, U.S. District Court, Southern District of New York.

Part of the airlines argument was that Silverstein has already recovered insurance proceeds.

What the ruling indicates is that there's a material issue of fact and summary judgment wasn't warranted.

If Silverstein were to recover at trial, I'd expect the airlines to immediately appeal. A ruling in Silverstein's favor would seriously hurt the airlines' bottom line, which is still on shaky ground (American is in bankruptcy and a judge just threw out the pilots' union contract deal). There's no way that this would settle since so much money is at stake and the airlines' financial situation is perilous.

If Silverstein doesn't win at trial, it would reduce his ability to build at WTC and elsewhere (though the real issue regarding construction of the stalled 2WTC and 3WTC is a lack of tenants who have committed to leasing at the unfinished buildings. Silverstein had also been hoping to build a skyscraper a few blocks away on Church Street, but that too has stalled after demolition of the former Moodys building.